Introduction to crm
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CRM has evolved over time from a focus on mass marketing in the 1960s to developing personal customer profiles and building customer-focused organizations today. CRM seeks to understand customers through collecting and integrating information on who they are, what they do, and what they like. The goals of CRM are to use existing customer relationships to grow revenue, provide excellent service through integrated customer information, and introduce consistent sales and service processes. Key benefits include improved customer service, sales, and increased revenues by better understanding customers.
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Introduction to crm
- 1. Prateek Jain CRM- An Introduction 1
- 2. 2
- 3. History of CRM 3 • 1960 : – ERA OF MASS MARKETING • 1970 : – SEGMENTATION AND CUSTOMISATION
- 4. 4
- 5. 1980 : NICHE MARKETING AND SFA 5
- 6. 1990 : RELATIONSHIP MARKETING, TELEMARKETING AND CALL CENTERS 6
- 7. Monopoly Market • Single Seller • Seller’s Market • No Close Substitutes • Barriers to Entry • Firm and Industry are the same 7
- 8. Bits and bytes • CRM – the hottest buzz word in businesstoday • Developing a personal and a professional profile about each customer – Basic and historical information – Personal preferences – Trends and habits – Demographical information • Building a CRM culture • The power of integration • Using emerging technology to get closer to the customer 8
- 9. Current facts… A Reality Check • Today customers are in charge – they make the rules • Putting technology at the center stage • Business intelligence is one of the most growing segment in the marketplace • Customer loyalty is very difficult to maintain due to competition • Customers want an excellent service and they want to feel special • Most companies think they are customer-focused however in reality they are product-centric • There is a need to formulate customer-focused firms which needs: – CRM strategy – Organizational change – Corporate culture 9
- 10. Economics of customer retention “Winning back a lost customer can cost up to 50-100 times as much as keeping a current one satisfied.” Rob Yanker, Partner, McKinsey & Company 10 Understanding your customer is key to retention…..
- 11. Why CRM? • It costs 6 times more to sell to a new customer than to sellto an existing one • A typically dissatisfied customer will tell 8 to 10 people about his/her experience (mainly related to poor customerservice) • The odds of selling to a new customer is 15% versus 50% to an existing customer • 70% of the customers complaining will do businessagain with the company if the complaints are quickly addressed • 90% of existing companies do not have integrated CRM tools and platforms 11
- 12. Customer Relationships Today Product Pricing Community Distribution Communication Branding Customer Relationships Building a customer-centric approach to Internet marketing by focusing on customers 12
- 13. CRM Basics • CRM is the timely delivery of excellent service “customer relationship management” • CRM is a combination of business process and technology that seeks to understand a company’s customers from a number of perspectives including: – Who they are? – What they do? – What do they like? 13
- 14. Age of the never-satisfied customer… 14 • CRM becomes a support tool in a time characterizedby: – Increased competition – Globalization – Growing cost of customer acquisition – High customer turnover • CRM is all about creating a better value propositionto customers • Information and communication technology is now acting asa catalyst for CRM – Extended enterprise – World wide web and the Internet
- 15. Defining CRM • CRM is an integrated sales, marketing and service strategy that is based on a timely and accurate information infrastructure and that depends on coordinatedenterprise- wide activities – Example: tracking customers interactions with the firm – Customer tracking includes steps in the sellingand customer service cycles • CRM steps include – Targeting – Acquisition – Retention – Expansion 15
- 16. Defining CRM 16 • Targeting – Who do we target? – What segments are most profitable? – What segments match our value proposition? – What is the best segmentation strategy forus/our industry? • Acquisition – What is the best channel for each segment? – What is the acquisition cost for a channel/segment? – Do certain channels deliver certain types of customers? – Cost effective acquisition?
- 17. Defining CRM 17 • Retention – How can we improve retention? – What is our average customer relationship length? – How can we hold customer for as long as possible? – What is the most cost effective method of retention? • Expansion – How many products does our average customerbuy? – How can we induce our current base to buy more products? – Who are the prime targets for expansion? – What is the cost of expansion?
- 18. Goals of CRM 18 • Using existing relationship to grow revenue • Using integrated information for excellent service • Introducing consistent, replicable channel processes and procedures
- 19. CRM… 19 • CRM is a business strategy and not a product • Putting CRM into practice requires developing a set of integrated applications to address all aspects related to the front-office needs • CRM could be a major support platform for small and medium-sized enterprises • Cost of the information and communication technology applications and infrastructure should be calculated as opposed to the return-on-investment
- 20. CUSTOMER RELATIONSHIP MANAGEMENT 20 • CRM enables an organization to: – Provide better customer service – Make call centers more efficient – Cross sell products more effectively – Help sales staff close deals faster – Simplify marketing and sales processes – Discover new customers – Increase customer revenues 20
- 21. THE BENEFITS OF CRM 21 11-21 • Firms can find their most valuable customers by using the RFM formula: recency, frequency, and monetary value • Organizations MUST track: – How recently a customer purchased items – How frequently a customer purchased items – The monetary value of each customer purchase
- 22. EVOLUTION OF CRM 22 11-22 • There are three phases in the evolution of CRM: – Reporting – Analyzing – Predicting • CRM Reporting Technologies help organizations identify their customers across other applications • CRM Analysis Technologies help organizations segment their customers into categories such as best and worst customers • CRM Predicting Technologies help organizations predict customer behavior, such as which customers are at risk of leaving
- 23. The Evolution of CRM • Three phases in the evolution of CRM include reporting, analyzing, and predicting 23
- 24. The Evolution of CRM 24
- 25. CUSTOMER RELATIONSHIP MANAGEMENT SUCCESS FACTORS • CRM success factors include: 1. Clearly communicate the CRM strategy. 2. Define information needs and flows. 3. Build an integrated view of the customer. 4. Implement in iterations. 5. Scalability for organizational growth. 25 11-25
- 26. THANK - YOU 26